Chenault: State surplus funds may not be as big as they seem

With a possible state budget surplus next year, Rep. Mike Chenault, R-Nikiski, said he wants to take a cautious approach to how it is spent.

“It sounds like a lot,” he said at Thursday’s Nikiski Chamber of Commerce luncheon.

“Can we spend it? I’ll bet we could,” he joked with the audience as he listed some of his legislative goals.

He said figures for the surplus are not yet known but estimated it would be between $1.5 billion and $2 billion.

He said there will be substantial increases in state operating costs such as Medicare and fuel costs and there will probably be about $300 million in increases before the state even thinks about extra projects.

There are some costs at the borough level that need to be addressed by the state, he said, referring to a formula the state uses to calculate the per-child funding amount Alaska school districts receive from the state.

Chenault said he has formed a task force to address how this formula, called the area cost differential, is calculated. Right now, the Kenai Peninsula School District receives almost the same amount of funding as Anchorage per student, he said.

Chenault contends that the cost differential needs to be adjusted for the Kenai district because the cost of doing business is higher here.

There is talk about upgrading some borough roads, as well, he said. Pointing to repaving the Kenai Spur Highway, Chenault said he has heard a lot of complaints that the road was recently repaved and was not done right the first time. He said it has been 12 years since it was last repaved.

In the next couple of years, both the Kenai Spur Highway and the section of Kalifornsky Beach Road between Bridge Access Road and the Sterling Highway are scheduled to be completely rebuilt, he said.

Looking at the issue of bringing North Slope gas to market, he said it is probably the biggest project of his lifetime.

“I’m ready to go to Juneau whenever they push the button,” he said about a possible special session to look at a Stranded Gas Act contract.

With three pipeline proposals on how to bring this gas to market, Chenault said, “I don’t have a proposal in front of me so I can’t say I support one over the other.”